>> it's called the kindle fire. >> tom: amazon sets the tablet market ablaze, unveiling a new product aimed at taking a bite out of apple's ipad. >> their consumers expected a work out, not to get worked over. >> susie: and reebok pays millions of dollars to settle claims its toning shoes didn't live up to the hype. it's "nightly business report" for wednesday, september 28. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> susie: good evening, everyone. a pullback in the markets today, but not for amazon.com. the stock was on fire after the company launched the kindle fire, a new tablet computer. and tom, there was a lot of hoopla at the unveiling here in new york. >> tom: susie, people have been waiting for this amazon moment, the price of the new kindle is much cheaper than expected-- $199-- less than half the price of apple's ipad.

but kindle fire will have less internal storage. >> susie: many big tech companies have tried and failed to lure business away from apple. erika miller looks at whether the kindle fire will catch fire with tablet customers. >> this is unbelievable value. >> reporter: amazon chief jeff bezos is fired up about kindle fire. but will tablet customers be too? and will they find enough reasons to pick it over apple's wildly successful ipad? "p.c. magazine"'s dan costa believes the $199 price tag is a game-changer in the marketplace. >> it can actually just grow the tablet market. i think there's a lot of room for growth here and they are just pioneering a new price point. this is only $200, so that's going to open up a whole new audience for them. another distinction is size-- at seven inches, fire is about three inches smaller than the ipad. >> reporter: size and price are not the only differences between the ipad and the kindle. amazon also hopes to set itself apart with its browser, which it says is better and faster.

>> it's very fast. >> reporter: forrester's sarah rotman epps thinks amazon will sell three to five million tablets before the end of the year-- roughly half of ipad's quarterly sales. >> the consumer that wants email, web and media, the kindle fire is a great product. anyone who wants to take their tablet to work to have a sort of double-duty work and leisure device, the ipad is going to be a better choice. >> reporter: most analysts believe amazon is losing money on the devices themselves. executive russ grandinetti says amazon goal's is to sell content and services. >> movies, music, video games, the device simply disappears and lets you watch, listen to, or read anything you want. >> reporter: amazon has had great success selling e-reader kindles. but, so far, no other tech company has been able to take a bite out of ipad's market. amazon could change that. >> i think the thing that makes amazon different is that they are the master of the consumer experience. they have 200 million credit card numbers.

they have great relationships with customers. they just need to leverage that and give these customers another tool. i think that's a huge advantage. >> reporter: investors are also optimistic. including today's big gain, the stock is up almost 30% this year. morningstar's r.j. hottovy has amazon shares rated "fairly valued" but hinted at a possible upgrade down the road. >> if we do see traction with kindle fire as well as other kindle products, and that leads to increased digital media sales at amazon.com as well as increased general merchandise sales, we could reassess our assumption. >> reporter: the kindle fire won't ship until november 15, just in time for the holidays. but unlike the ipad, it's only available in the u.s. for now. that's significant, because currently half of all ipad sales are to customers in other countries. erika miller, "nightly business report," new york. >> susie: meanwhile, samsung has inked a patent deal with microsoft as it faces an intellectual property war with apple. samsung appears to be giving

most of the ground in this deal. it has agreed to pay microsoft royalties for its android phones and tablets, and it will also help develop and market windows phone devices. the move strikes a blow at google's effort to provide free software to makers of smartphones and tablet personal computers. and google made its own power moves today. the search giant launched a development partnership with intel. the two firms will work together to bring intel-powered smartphones to the market faster. >> tom: stocks snapped a three- day winning streak as investors worry about europe's ability to contain its debt crisis. traders focused on remarks from at the close, the dow fell nearly 180 points, the nasdaq lost 55 and the s&p 500 off 24 points. volume down slightly from yesterday's pace with just over one billion shares moving on the big board and just under two billion on the nasdaq. traders focused on remarks from german chancellor angela merkel suggesting that the second greek bailout package might have to be

renegotiated. several european leaders want banks to take bigger losses on greek bonds. france and the european central bank oppose the idea. could relearn a few lessons from developing country, adopt budget poms and embrace free trade, maybe public investments and support education. speaking to an audience in cleveland, bernanke appeared to criticize lawmakers and others in the u.s. who see he says have failed to embrace key economic principles. so there are positive signs today. u.s. companies ordered more machinery, computers and communication equipment last month. overall orders for durable goods slipped 0.1%. the modest decline was largely due to a bigger drop in orders for autos and auto parts. an increase in demand for durable goods suggests businesses are sticking with their investment plans, despite slow growth and weak consumer spending.

still ahead, what's on the menu for our "street critique" guest? hillary kramer goes shopping for peanut butter and coffee. >> susie: you can call it a fitness flop. reebok will pay $25 million in refunds to customers who bought its "easytone" and "run tone" sneakers. the federal trade commission says reebok made false claims in commercials that those shoes were proven to help strengthen certain muscles. darren gersh has details. >> reporter: reebok ads for its toning shoes were not subtle. >> it's the shoe proven... >> dude... >> ...to work your hamstrings and calves up to 11% harder and tones your butt up to 28% more than regular sneakers. >> reporter: the federal trade commission says the reebok ads were also not true, fining the company $25 million to settle charges of deceptive advertising. >> we are here this morning as the nation's consumer protection agency to remind advertisers, big and small, that they must have adequate proof for the claims they make in their ads.

we're also here to remind consumers that there are no shortcuts to a fit and healthy body. >> reporter: reebok-- which is owned by adidas-- agreed to a fine and to not to make any new ads claiming its toning shoes strengthen muscles. but it did not admit that it did anything wrong. in a statement, the company said, "we fully stand behind our easytone technology. settling does not mean we agree with the f.t.c.'s allegations. we do not. we have received overwhelmingly enthusiastic feedback from thousands of easytone customers. >> reporter: toning shoes were a big business, bringing in $1 billion last year. but so far this year, demand has fallen almost by half as consumers realized the $100 shoes did not provide million- dollar looks. >> reporter: "consumer reports" say this fad may have run its course. >> i think consumers are losing confidence in the shoes, not only because they may not be believing the claims that have been made, but also because they have been hearing about the

number of injuries associated with people who have worn these shoes. >> reporter: at the f.t.c., regulators say other advertisers should think carefully about the health claims they make. >> so if you're an advertiser, remember that marketing campaigns, no matter how smart, clever or funny, must start with and must stick with product claims that are substantiated. advertisers must have substantiation for claims before they make them. >> reporter: reebok has been counting on its easytone sneakers to lead the shoe maker's revival. at the very least, it will now need a new ad campaign to get there. darren gersh, "nightly business report," washington. >> tom: despite the recent collapse of solar manufacturer solyndra, the u.s. department of energy today awarded loan guarantees totaling more than $1 billion dollars to two solar companies developing power plants. one deal is a $737 million loan guarantee for a company called solar reserve. the money paves the way for construction of a solar facility

in nevada using mirrors to focus the sun's heat and power a steam generator. a second $337 million loan guarantee backs a sempra energy project in arizona. that facility will use u.s.-made solar panels converting sunlight into electricity. today's announcement comes with only two days left in the energy department's most sought-after loan program for clean energy. it ends friday. the new loan deals come as congressional republicans push to investigate the $535 million loan guarantee to solyndra, which declared bankruptcy earlier this month.

>> susie: tom, everybody is worried about what's going on in europe, as you just reported, and it's all going to be about this financial aid plan for those ear row zone countries and is it going to work or not. and we'll find out more tomorrow. maybe that will change the tone in the market. >> tom: all eyes on germany, no doubt bit. let's go ahead and roll with tonight's market focus. the volatility continues for the major stock indices, sinking in afternoon trading ahead of a key vote in the german parliament tomorrow over a european bailout plan for greece. early in the day, the dow industrial average looked to add to three straight sessions of

gains, but the index went negative by 1:00 p.m. eastern and fell more than 150 points in the last 45 minutes of the session to end down 1.6%. the biggest loser was bank of america. the stock shed another 5%. volume was lighter than usual, but it was still the most actively traded stock on the big board. the drop today brings b. of a. down to less than 20 cents away from its 52-week low, hit just last week. aluminum maker alcoa also pressured the index, falling almost 5%. over the past two weeks, shares have weakened considerably, falling below $10 per share today and on heavier-than-usual volume. alcoa is bouncing around its 52- week low, most recently hit on today. alcoa's weakness highlights the selling we saw today in the materials sector. it was the weakest area for the market. iron ore producer cliff's natural resources and steel maker a.k. steel dropped more

than 8% each. copper and gold miner freeport mcmoran fell more than 7%. this was mirrored across the commodity markets. where we saw a lot of selling pressure. silver, crude oil and corn all fell as the u.s. dollar rebounded some from yesterday's losses. take a look at the breakdown in copper. this metal has many basic and industrial uses. it is seen as very sensitive to the global economy and an indicator of economic strength or weakness. look at the dive we've seen in copper. copper is at its lowest price in more than a year. it's down 30% from august as the european worries gathered steam and u.s. economic data was disappointing. clearly big worries being priced into copper. swimming against the tide of selling in the market? amazon.com. erika detailed its launch of its first tablet computer, pushing the stock up more than 2%. nice move here. volume more than doubled.

the new device gives amazon ammo in its e-reader battle with the nook from barnes & noble. and that stock saw some heavier- than-usual selling. no surprise. barnes & noble shed almost 7% over worries about the new competition. coming from amazon. it bears mentioning apple and the lack of a reaction. shares were down a fraction on lighter volume. the stock has seen some profit taking since hitting a new high two weeks ago. while we're talking about technology, semiconductor maker advance micro devices updated its quarterly forecast late today. a.m.d. cut its growth predictions for revenue and gross margins. the company blames problems at a german manufacturing plant. a.m.d.'s quarterly earnings are due in a month and worries about tablet computers eating into the traditional personal computer business have been a shadow over the industry.

a.m.d. fell 5% during the regular session and shed another 9% after the closing bell. if that selling holds, it would take a.m.d. to a new 52-week low. also in technology, electronic manufacturing services firm jabil jumped to a two-month high, up more than 8% thanks to better-than-expected profits and outlook. and finally, eastman kodak. this household name continues plunging to new lows. credit ratings agency fitch cut kodak's i.o.u.'s further into junk territory. kodak has been trying to shift its focus to printing. last week, the company tapped into a credit line, fueling concerns about cash flow. and that's tonight's "market focus." >> susie: and general motors also in focus. shares fell nearly 4%, closing at $20.41 as the automaker ratifies a four-year contract with the united auto workers union. the deal will save thousands of factory jobs and creates an estimated 57,000-plus jobs at auto-related businesses. the contract also offers buyouts

for skilled trade workers and caps profit sharing at 12,000 per employee. with the g.m. deal ratified, the union is moving on to complete talks with ford motor. meanwhile, the pilots' union at u.s. airways received strong orders from a federal judge today. an injunction filed in charlotte says the pilots must stop intentionally delaying flights. u.s. airways accused the pilots of slowing down on purpose by delaying training, taxiing slowly and refusing to fly because they were too tired. the union has denied that it's encouraging a slowdown. >> tom: low consumer confidence and low interest rates are the recipe for tonight's "street critique" stock picks. and that recipe makes peanut butter, jelly and coffee. hilary kramer is back with us-- editor of gamechangerstocks.com. must be talking about j. m. smucker here. the food company, an unusual ticker symbol, sjm. where is the growth here for smucker's? >> the coffee industry.

their sector, they have 40% of the in-store coffee market and it very profitable, marriage ins above 20% continue to grow. and the follow jer's brand, dunkin' donuts, and that really helps smucker's be in a different position from other packaged goods companies. and of course also commodity prices are coming down. so that helps the growth and the fattening of what we call the imagine ins for a company like smucker's. >> tom: in the meantime you do collect that nice dividend, certainly nice relative with what fixed incomes pay these days of. >> i'll take 6.2% any time it comes in, it has been around almost 100 years, but also a category killer in that seven major brands across different categories in the supermarket, and all the right price. the consumer, also know, tom, is pressed right now. bad as it ever been, and a company like smucker's can really star be be appealing to investors.

>> tom: let's get an update. some viewer i mails, this one asking hillary, are you still holding super media, the sector looks very weak, spmb, the ticker symbol, you liked it on december 15, it has been crushed here, off 78%. >> it's just been a disaster. this was the former yellow pages, that was trying to go social media online, but the whole sobl media valuations have collapsed. i've held mine, it's really been disastrous. so it's a shame, on super media and anyone who is looking at an online social media opportunity, it's all spun around and on is its head now. >> tom: do you wind up cutting the losses at this point, selling? >> most investors should do that, that would be the rule of thumb, you get out and deploy your money into something better. in my case, i'm holding out in case there's some opportunity,

because the company still makes money. it might be shrinking, but there's real revenue there. >> tom: okay. don writes in late 2010 optimer was a strong recommendation, do you still recommend holding or is selling a better option? it's seen a nice rally in the last few weeks, bringing it 50% from your price. do you still hold it? >> i just recommended last week that the subscribers in my portfolio sell optimer, it was $17, that's how volatile our market is, now that's that 14 to 15 range. but if you've made money, take it off the table. we've said that with pharmacists, can you always keep a small portion just in case it does get acquired, but take your money in this market, cash is king. >> tom: absolutely. how about disclosures, you mention you still own super media. do you have any position left in optimer? >> a very small position in

optimer left and i do not own smucker's. >> tom: you can e-mail your questions to street critique at nbr. our guest this evening from the nasdaq, hilary kramer, gamechangerstocks.com. >> susie: here's what we're watching for tomorrow: we get the government's latest read on how much the economy grew in the second quarter, and we'll see pending home sales for august and weekly jobless claims. also tomorrow, pimco's mohammed el-erian joins us to talk about the markets and why europe needs to take immediate action to solve its debt crisis. tyson fresh meats is recalling 131,000 pounds of ground beef that might be contaminated with e. coli. the recall came after an ohio family fell ill and beef in the home tested positive for the e. coli bacteria. the beef was packed on august 23.

it was sold under the kroger and butcher's brands and sold as generic ground beef. the labels also have the code 245d and a "best before" date of september 12. >> tom: meanwhile, the death toll continues climbing in the deadliest food outbreak in a decade. as many as 16 people have died from a listeria outbreak traced to cantaloupes grown in colorado. the centers for disease control says that so far 72 people have gotten sick. but the illness is hard to trace because it has a long incubation period. it can take up to two weeks to show up after eating the tainted food.

>> susie: americans are paying more-- a lot more-- for health insurance coverage. rising health care costs and insurer profits are to blame, according to a study released today. annual premiums for family coverage rose 9% this year. they surpassed $15,000 for the first time ever, according to the kaiser family foundation. overall, the cost of family coverage has almost doubled since 2001. there is considerable debate about how much the new federal health care law signed by president obama affects insurance rates. we're likely to get more clarity about the legality of that legislation in the months to come. today, the obama administration asked the u.s. supreme court to quickly decide the issue in its upcoming term. arguments are expected in the

spring and a decision from the justices should come by june of next year. many employees will soon find out how much more they will be paying as they receive notices from their companies about health insurance coverage for next year. in tonight's "money file," how to get the most out of your healthcare benefits so you maximize your savings. here's manisha thakor, co-author of "on my own two feet: a modern girl's guide to personal finance." >> it's that time of year again- - open enrollment period. this is the annual window where you can sign up for, or adjust, your participation in a variety of employee benefits that range from traditional health insurance to a variety of pre- tax accounts. alas, a recent harris interactive/aflac study showed that 77% of people admitted that they made mistakes when signing up for their benefits packages in past years. what kind of mistakes are we talking about? one of the most common errors actually was forgetting to sign up for healthcare f.s.a.s. f.s.a.s enable you to set aside pre-tax dollars to pay for qualified health care costs.

depending upon your tax bracket, an f.s.a. can save you up to 40% on items you already pay for out of pocket, such as co-pays for doctor visits or prescription drugs. note, even if you participated in an f.s.a. last year, you still have to actively re-enroll this year. for more guidance on how to get the most out of your employee benefit options during this open enrollment season, be sure to visit your h.r. department. i'm manisha thakor. >> tom: just a reminder: we're always online at n.b.r. on pbs.org. there you'll find all the market data from the program. you can email us your comments and questions and watch any programs you may have missed. we're also on twitter. follow us, @bizrpt, or my personal feed, @hudsonnbr. we're also on facebook at bizrpt. finally, expect to pay more for 3d movies next summer. sony pictures says it will stop paying for the 3d disposable glasses starting in may. the glasses cost anywhere from

40 cents to $1 a pair. that can eat up $5 million or more for a movie that grosses over $100 million. the national association of theater owners says sony should have negotiated with them before trying to change their plans. the change is set for may, susie, ahead of the release of a couple of huge 3d blockbusters, including "men in black iii" and "the amazing spiderman." they still do not make prescription 3-d glasses, so i still have to put them over my glasses. >> susie: or you can bring your own. >> tom: i may have to if the price get toos high. that is "nightly business report" for tonight, september 28. have a great night, susie. >> susie: thanks for watching, vup, hope to see awe of you again right here tomorrow night.

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